Shares of Ollie’s Bargain Outlet Holding jumped 4.6% in Thursday’s extended trading session after the retail company reported better-than-expected 4Q results. Strong top-line growth, margin expansion, and cost control were the primary drivers.
Ollie’s (OLLI) 4Q adjusted earnings surged 31.1% to $0.97 per share on a year-over-year basis and outpaced Street estimates of $0.85 per share. Net sales increased 22.1% to $515.8 million and surpassed the consensus estimate of $488.37 million.
The company’s comparable-store sales growth was 8.8% year-over-year. Gross margin was 39.7%, up 50 basis points (bps). Additionally, as a percentage of net sales, adjusted selling, general and administrative expenses decreased 40 bps to 22.2%.
Earlier this week, Ollie’s announced a $100 million increase in the share buyback program to $200 million approved for share repurchases, which will expire on Jan. 13, 2023.
Ollie’s CEO John Swygert commented, “Based on our proven business model, our strong financial position, and the opportunities in front of us, we are bullish on our ability to drive profitable growth and deliver on our long-term growth algorithm into the future.” (See Ollie’s stock analysis on TipRanks)
Piper Sandler analyst Peter Keith increased the stock’s price target to $107 (24.4% upside potential) from $94 and reiterated a Buy rating following “the better than expected Q4 results.”
In a note to investors, Keith said, “Comps should likely accelerate over the next month before hitting very tough compares starting mid-April.”
The rest of the Street is cautiously optimistic on the stock with a Moderate Buy consensus rating based on 4 Buys, 1 Hold, and 2 Sells. The average analyst price target of $100.14 implies 12.6% upside potential to current levels. Shares have increased 5% so far this year.
According to TipRanks’ Smart Score system, Ollie’s gets a 7 out of 10, which indicates that the stock is likely to perform in line with market averages.
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